Archive for October 2013

Augusts’ Annual Home Price Gains Set Post-Crisis Record

October 31, 2013

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This is last quarter’s information. In the last couple of months the home prices, while continuing to rise, have tapered off quite a bit. Look for price to level out or just a small rising trend through winter. For a more detailed look at this subject please read the article below.

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The S&P/Case-Shiller Home Price Indices rose once again in August at their fastest annual rate in more than six and a half years, but the monthly pace continues to slow.

The Case-Shiller 10- and 20-city composites each posted yearly growth of 12.8 percent over August 2012, breaking July records and setting the fastest pace for growth since February 2006. Compared to July’s indices, annual growth accelerated in 14 of the tracked cities.

All 20 cities experienced price growth compared to last year, and 13 reported double-digit gains, with Las Vegas leading at 29.2 percent—its fastest rate of growth since March 2005.

Monthly numbers were slower, with both composites seeing a 1.3 percent increase—indicating prices may be approaching a plateau.

“The monthly percentage changes for the 20-City composite show the peak rate of gain in home prices was last April. Since then home prices continued to rise, but at a slower pace each month. This month 16 cities reported smaller gains in August compared to July,” said David M. Blitzer, Index Committee chairman at S&P Dow Jones Indices. “Recent increases in mortgage rates and fewer mortgage applications are two factors in these shifts.”

All cities posted monthly improvements over July; again, Las Vegas set the pace at 2.9 percent, with Seattle sitting at the bottom at 0.5 percent.

To read the complete article please use the link below.

Home Price Gains

Serious Delinquencies Hit Five-Year Milestone

October 31, 2013

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The delinquency rate is improving not because of the job market, which is basically stagnant, but because of the relative low interest rates and higher home prices. For a more detailed look at this subject please read the article below.

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Mortgage delinquencies are on the decline, according to a report from Equifax. Home finance write-offs so far this year total $96.3 billion, down 22 percent compared to the same time period last year, the company says.

“We’re now back to where we were in mid-2008 in terms of severely delinquent first mortgages and current trends suggest we will be at pre-recession levels of severe delinquencies by the end of 2014,” said Amy Crew Cutts, chief economist at Equifax.

She credits “improvements in labor markets and rising home values” for the recent declines in delinquencies, adding that “the outlook is very positive for continued improvement.”

Delinquencies on first mortgages declined 24.5 percent year-over-year in September, according to Equifax.

Severe delinquencies—those 90 or more days past due—also declined, falling about 29 percent over the year. In fact, Equifax points out that the balance of mortgages in severe delinquency is less than $300 million for the first time in five years.

Loans originated between 2005 and 2007—the bubble years—make up 64 percent of the loans in severe delinquency, according to Equifax.

REO rates also declined over the year in September, declining 27.9 percent, reaching a low not seen in more than five years. The current REO rate is 1.71 percent, according to Equifax.

“Generally speaking, transitions to deeper stages of delinquency are slowing, so for example, fewer loans that are now 30 days late are transitioning to 60 days late,” Crew Cutts said.

To read the complete article please use the link below.

Delinquencies Hit Five-Year Milestone

Report: Market Will Prosper Under Ability-to-Repay, QM Rules

October 30, 2013

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The less involvement in private business the Government has the better. That being said this rule just seems like common sense. As long as the requirements for loan approval are not out of line, and these seem to be basically OK, then they should not hurt the housing market in the long run. For a more detailed look at this subject please read the article below.

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Today’s resilient capital market has the capacity to adapt readily to the pending Ability-to-Repay and Qualified Mortgage (QM) rules set to take effect January 10, 2014, according to a white paper CoreLogic released Friday.

The paper titled, ATR/QM Standards: Foundation for a Sound Housing Market, provides an overview of the rules themselves and examines their possible impact on the market.

The Ability-to-Repay rule requires lenders to take eight borrower attributes into consideration: “borrower’s current income or assets; current employment; the monthly payment for the loan, as well as any other loans secured by the same property; monthly payments for property taxes and insurance for which the borrower is responsible; current debt obligations; the borrower’s monthly debt-to-income ratio or residual income; and credit history,” CoreLogic explained.

A “Qualified Mortgage” meets a set of standards that provide “safe harbor” for lenders. These mortgages are automatically considered to be compliant with the Ability-to-Repay rule.
“To be QM-eligible, a loan has limits on points and fees to be paid, as well as underwriting features allowed,” CoreLogic stated.

For the first seven years under the new regulations, loans that meet the purchase requirements for the GSEs, or the underwriting standards for the Federal Housing Administration, the Veterans Administration, or the U.S. Department of Agriculture, “fall into a temporary exemption and are considered QM as long as the loan provides for no interest-only payments, has a term that does not exceed 30 years, and meets the QM limitations on points and fees,” CoreLogic stated in its white paper.

To read the complete article please use the link below.

Ability-to-Repay

Mortgage Rates Fall as Markets Cope from Shutdown

October 28, 2013

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You should look for this to be the “norm” for the next 6 months or more. Small changes, both up and down, in interest rates are what will happen as long the Feds keep buying bonds and the job growth is slow or non-existent. For a more detailed look at this subject please read the article below.

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Though Capitol Hill’s gridlock over the debt ceiling was resolved—for now, at least—mortgage rates this week took a spill as market uncertainty spooked investors.

Freddie Mac released Thursday its Primary Mortgage Market Survey, which shows the 30-year fixed-rate mortgage (FRM) falling to an average rate of 4.13 percent (0.8 point) for the week ending October 24, down from 4.28 percent and the lowest level in about four months. Last year at this time, the 30-year FRM averaged 3.41 percent.

The 15-year FRM this week averaged 3.24 percent (0.6 point), down from 3.33 percent.

Adjustable rates were also impacted. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.00 percent (0.4 point) for the week, declining 7 basis points, while the 1-year ARM averaged 2.60 percent (0.5 point), down 3 basis points.

“Mortgage rates slid this week as the partial government shutdown led to market speculation that the Federal Reserve will not alter its bond purchases this year,” explained Frank Nothaft, VP and chief economist for Freddie Mac.

“The weak employment report for September added to this expectation. The economy added just 148,000 jobs, which was below the market consensus forecast and less than the 193,000 jobs increase in August,” he added.

Bankrate.com’s weekly measure of interest rates also showed them declining to a post-summer low, with the 30-year fixed averaging 4.42 percent and the 15-year fixed averaging 3.37 percent.

To read the complete article please use the link below.

Mortgage Rates Fall

Home Value Appreciation Set to Ease Over the Next Year

October 28, 2013

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This is good news for both buyers and sellers. Sustained rapid growth can lead to another housing bust and nobody wants that. For a more detailed look at this subject please read the article below.

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The recent fast-paced home price appreciation across the country led some markets to the brink of a bubble, but deceleration over the summer months has Zillow analysts breathing a sigh of relief as the bubble threat deflates.

Home value appreciation has declined steadily for three months, according to Zillow, and half of the nation’s 20 largest metros experienced negative appreciation in September.

“Far from being a negative sign, we’re relieved to see more noticeable signs of cooling in the market,” said Stan Humphries, chief economist for Zillow.

“If home values continued to rise as they have, relatively unchecked, we would almost certainly be headed into another bubble cycle, and nobody wants that,” Humphries said.

At 1.2 percent, home value appreciation in the third quarter was about half that of the second quarter, according to the U.S. Zillow Home Value Index.

Year-over-year, home values appreciated 6.4 percent, according to Zillow.

Zillow’s Home Value Index is now $163,000.

While some markets continue to struggle, a few California markets—despite having escaped the worst of the housing crisis—have experienced fast-paced price gains over the past year.

Rising prices threatened affordability in these markets as income growth lagged behind.

San Diego, California; Los Angeles, California; and San Francisco, California—all having posted monthly price gains around 3 percent a few months ago—experienced price depreciation at the end of the third quarter.

To read the complete article please use the link below.

Appreciation Set to Ease

Housing Market Performs Well Despite Rise in Interest Rates

October 26, 2013

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While the small increase in mortgage rates did not affect the market much if the rate continues to rise you will see a sharp decline in sales. For a more detailed look at this subject please read the article below.

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Mortgage rates are inching higher and higher, but the market does not seem to be paying any heed as it continues to show signs of improvement, according to the HousingPulse Tracking Survey released Wednesday by Campbell Surveys and Inside Mortgage Finance.

Home sales were down somewhat in September, but other indicators—such as distressed sales, time on market, sales-to-list-price ratio, and purchase offers—remained positive, according to the survey.

“The emerging slowdown in home purchases appears to be largely seasonal,” said Thomas Popik, research director for the HousingPulse survey. “September is yet another month where higher mortgage rates have had only a moderate effect on the housing market.”

HousingPulse also tracks distressed property sales, finding the share of home purchases involving REOs and short sales decreased to 24.6 percent over the three-month period ending in September, marking a four-year low.

Time on market also fell to a four-year low last month, according to HousingPulse. Homes spent an average of 8.6 weeks on the market, based on the September data gathered. Notably, this is down from the spring home buying season when time on market was about 10 weeks.

To read the complete article please use the link below.

Housing Market Performs Well

Unemployment, High Rates Still Obstacles for Many Facing Foreclosure

October 26, 2013

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It would seem that this is a very worthwhile program. The only question is for the 920 million dollars that the counseling program claims to have saved how much did it cost taxpayers? For a more detailed look at this subject please read the article below.

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The National Foreclosure Mitigation Counseling (NFMC) program has provided counseling to almost 1.6 million homeowners across the country since the program started in 2008.

According to an NFMC congressional report released Monday, common attributes of struggling homeowners include unemployment or underemployment and high mortgage rates.

About 62 percent of homeowners reaching out for foreclosure prevention counseling report income loss or reduction as the primary reason they are delinquent on their home loan, according to NFMC.

NFMC also pointed out that 37 percent of homeowners receiving counseling spend more than half their income on monthly mortgage payments. About 19 percent spend more than 75 percent of their income on mortgage payments, according to NFMC.

“Although the economy is improving, there are still many homeowners who need foreclosure prevention counseling and the NFMC continues to assist thousands of families,” said Eileen Fitzgerald, CEO of NeighborWorks America, which administers NFMC.

Almost 20 percent of homeowners receiving counseling through NFMC programs have mortgage loans with interest rates of 8 percent of higher.

However, NFMC pointed out in its report that this is down from 40 percent in October 2008.

Homeowners who receive counseling through NFMC are more likely to obtain loan modifications, and when they do they are more likely to receive higher monthly savings on their mortgage payments and are also less likely to redefault on their loans, according to NFMC.

To read the complete article please use the link below.

Unemployment, High Rates